March Madness and $1 Wagers
I’ve known my friend Clarence since first grade. In those 35+ years, we’ve been in constant competition—in school, in sports, in video games, in debates, and pretty much anything for which we could declare a winner or loser. (Obviously, I’m much better looking, so there was never much competition there.)
An important element of the competition is making $1 wagers with each other. While giving the best man speech at his wedding, I even forced him into a $1 bet about who would have kids first. Neither of our wives was amused.
The wager is always $1 because it’s never about the money. Rather, it’s about the satisfaction of the other person admitting that you bested them and handing over hard currency.
Over those years, Clarence and I have also been filling March Madness brackets and competing on who’s made the better picks. In recent years, however, it’s become a couples contest with the losing couple having to take the winners out to dinner. But even with the higher stakes, I’ve usually gotten to March without having watched more than 10 minutes of college basketball all season, which makes the prediction contest less than satisfying. This year, I realized that AI could help.
I essentially told Claude, “My friends are both Michigan alums, and I think they are going to be loyal to Michigan. Analyze our contest scoring system and show me a strategy to exploit their emotional decision-making. The satisfaction of winning and the expensive dinner they’d have to buy are more important to me than being loyal to Michigan myself.”
The one problem with that strategy: poor operational security. My wife mentioned to Clarence that we were coordinating our picks, prompting him to ensure he and his wife, Anita, also adopted the strategically optimal diversification strategy. Our advantage was gone.
The situation is an example of how implementing AI isn't a strategic move in itself. Implementing AI is like being the first factory owner to install electricity in your plant—it creates a short-term efficiency advantage, but everyone eventually catches up because they can access the same technology. Indeed, Clarence and Anita chose the exact same championship picks, which is another reminder that AI isn’t necessarily better than an intelligent human.
Instead, AI is only strategically meaningful when connected to another capability, unique data, or a creative insight that enables you to leverage the technology differently from others. If we want to compete well in future years, it’ll take deeper knowledge and a unique perspective.
Despite the execution hiccup, Erin and I are currently leading the contest by 90 points. I’ve already started searching for reservations at the fanciest restaurants in town. 🙂